According to Bot’s latest Press Release, the Thai economy continued to be on a decelerating trend in November, prompting the Central Bank to use the exact same words from its previous Press Release on the Economic and Monetary Conditions in October, to describe the overall situation in November.
The value of merchandise exports continued to contract, mainly due to the economic slowdown of trading partners, consistent with deterioration in merchandise imports, manufacturing production and private investment indicators.
Public spending also contracted from both current and capital expenditures. Meanwhile, private consumption indicators continued to decelerate amid support from the government’s economic stimulus measures. The tourism sector continued to expand.
On the stability front, headline inflation edged up from the previous month on the back of higher core inflation and lower contraction in energy prices. The seasonally adjusted unemployment rate slightly increased while the number of employed persons was unchanged. The current account remained surplus. The capital and financial accounts posted a deficit from the asset position.
Details of the economic conditions are as follows:
The value of exports dropped by 7.7 percent
The value of merchandise exports contracted by 7.7 percent from the same period last year, nearly the same as export values excluding gold.
The contraction of exports in almost all categories was due to
1) the economic slowdown of trading partners;
2) the non-obvious recovery in electronic cycle; and
3) the contraction of global crude oil prices, coupled with the temporary maintenance shutdown of some oil refineries, leading to the contraction of petroleum-related products exports, both in terms of prices and quantity.
Additionally, structural changes in production and global trade as a result of trade tensions caused some Thai export products to be replaced by Chinese products in ASEAN markets. However, exports of agro-manufacturing products continued to expand. As a consequence of the merchandise exports contraction, manufacturing production continued to decline.
Imports contracted by 13.9 percent
The value of merchandise imports contracted by 13.9 percent from the same period last year, and excluding gold, imports value contracted by 15.4 percent.
The contraction of imports in almost all categories, consistent with softening economic activities, was attributable to 1) imports of raw materials and intermediate goods especially in crude oil, partly due to the maintenance shutdown of some oil refineries; 2) imports of capital goods mainly from turbo-jets and telecommunication equipment; and 3) imports of consumer goods particularly in fishery products due to the high base effect last year.
Private investment indicators continued to deteriorate from the same period last year
This was a result of weak domestic and external demand and the low rate of capacity utilization in manufacturing sector, making businesses delay their investment.
Consequently, investment in machinery and equipment continued to contract from imports of capital goods, domestic machinery sales, and the number of newly registered motor vehicles. Meanwhile, investment in construction declined from permitted construction area for residential purposes, consistent with subdued activities in the real estate sector. However, the permitted construction area for manufacturing purposes continued to grow while the permitted construction area for commercial and other purposes turned into expansion this month.
Public spending, excluding transfers, contracted from both current and capital expenditures
Current expenditures contracted due to purchases on goods and services from disbursement of some national security authority. Meanwhile, central government’s capital expenditures continued to contract as the FY2020 budget has yet to be enforced. State enterprise’s capital expenditures slightly contracted mainly from energy-related agencies.
Private consumption indicators expanded at a slightly higher pace from the same period last year but continued to be on a decelerating trend relative to the first half of the year, in line with softening non-farm income and consumer confidence, together with financial institutions’ tightening of credit standards for auto-leasing loans after credit quality deteriorated.
Meanwhile, the government’s economic stimulus measures continued to somewhat support household purchasing power. In this month, spending on non-durable goods and services decelerated, after accelerating in the previous month due to the government’s economic stimulus measures.
Nevertheless, spending on semi-durable and durable goods continued to contract especially on vehicle sales.
The tourism sector continued to expand.
The number of foreign tourist arrivals continued to expand at 5.9 percent compared with the same period last year from
1) the exemption of the visa on arrival fee, encouraging more visitors from China, India, and Taiwan;
2) the recovery of the Russian economy and an increase in airline route from Russia to Thailand, supporting more Russian tourists; and
3) the continued expansion of other Asian tourists such as those from Laos and Japan. However, the number of foreign tourists grew at a softer pace from the previous month as the low base effect from the tour boat incident in Phuket last year faded.
On the stability front, headline inflation stood at 0.21 percent, accelerating from last month on the back of lower contraction in energy prices, due to higher domestic retail petroleum prices from the previous month, and a slightly increase in core inflation. The seasonally-adjusted unemployment rate slightly increased while the number of employed persons was unchanged. The current account remained surplus. The overall capital and financial accounts registered a deficit from the asset position as a result of Thai Direct Investment (TDI) especially in equity, and portfolio investment in debt securities of Thai investors.
Bank of Thailand
30 December 2019
Thailand’s economic growth expected to return to 2019 levels in mid-2023
Although the economy would recover next year, the recovery is still substantially below potential level resulting in a large output loss and could affect Thailand’s potential economic growth in the future with the economy expected to return to 2019 levels in mid-2023.
The Siam Commercial Bank (SCB), one of Thailand’s largest commercial banks, said in its latest economic outlook report that the country’s economy may wait until the second semester of 2023 to return to 2019 growth levels.(more…)
World Bank cuts Thailand’s GDP growth outlook to 1% in 2021
The World Bank has said that Thailand’s economy is forecast to grow 1% this year, down from the 2.2% projected in July, hit by a spike in COVID-19 cases and a delayed reopening to visitors.
Can border reopening revive tourism in South-East Asia?
In Thailand, where pre-pandemic tourism accounted for 11-12% of GDP, the country lost an estimated $50bn last year as Covid-19...
Thailand dropped from UK’s tough covid-19 travel ‘red list’
Earlier, Thailand was listed among countries with high infection levels that were put on a ‘red list’, requiring arrivals to...
The ASEAN-Russia Trade and Investment Cooperation Work Program
ASEAN and Russia recently agreed to enhance and widen economic cooperation at the 10th ASEAN Economic Ministers (AEM)-Russia Consultations held...
Flexible Workspace Startup Worklounge Debuts with 20+ Luxury Member Lounges in Thailand
Worklounge launches a premium membership granting remote professionals and executives access to exclusive hotel lounges across Thailand. Their platform is...
5 insights to guide ASEAN’s digital generation in a post-pandemic world
We surveyed 86,000 people from six ASEAN countries about their views for a post-pandemic world. The ASEAN Digital Generation Report...